Registered trademarks: on the meaning of "computer software"
A much awaited preliminary ruling of the Court of Justice of the European Union may redefine the way trademarks are registered, preventing the use of terms and categories like "computer software", considered generic and too broad and consequently conferring an uncontrolled monopoly to the trademark owner. Similarly to the case at hand, the same approach may in the future be followed for other terms which are able to recall a large scope when it comes to the identification of the specific goods and services involved in the trademark application, such as the terms "publications" or "consulting services". What are the possible consequences of the judgement?
On 16 October 2019, the Advocate General Tanchev issued an opinion in a dispute that could easily reshape the trademark registration practices.
The dispute involves Sky plc, Sky International AG and Sky UK Limited ("Applicant"), active in the satellite and digital television broadcast service, against Skykick UK Limited and Skykick Inc ("Defendant"), which supply cloud migration information technology services.
The case started when the Applicant sued the Defendant for having allegedly infringed its EU trademarks, before the High Court of Justice of the UK.
The Defendant supported its position by counterclaiming, inter alia, that the Applicant’s trademarks were invalidly registered, on the two grounds that (i) the specifications of goods and services lack clarity and precision and (ii) the relevant trademark applications were consequently made in bad faith.
With regard to the first ground, the requirement of clarity and precision for a trademark to be validly registrable stems from the CJEU judgement of 19 June 2012, Chartered Institute of Patent Attorney v Registrar of Trade Marks (also known as "IP Translator" case), Case C-307/10, which established that an applicant must specify the goods and services in respect of which the trademark registration is sought "with sufficient clarity and precision to enable the competent authorities and third parties to determine on the basis of that term alone the extent of the protection conferred by the trademark". In case the applicant fails to do so, the competent authority should refuse the registration application.
On this, the referring court raised for the CJEU judgement the issue whether the term "computer software", used by the Applicant for its trademarks in the case at stake, is sufficiently clear and precise according to the IP Translator judgement’s criteria.
Advocate General Tanchev has taken a clear position on the matter: according to his findings, while in one sense the term "computer software" is compliant with the clarity requirement given it comprises computer code, "it undoubtedly lacks the precision requirement since it covers goods that are too variable in their function and field of use to be compatible with the function of a trademark".
The Advocate General reached his conclusions by following the footsteps of the IP Translator case, where the CJEU ruled in 2012 that "some of the general indications in the class headings of the Nice Classification … are not such as to meet [the requirement of being sufficiently clear and precise] where they are too general and cover goods or services which are too variable to be compatible with the trade mark’s function as an indication of origin". According to Advocate General Tanchev, that is precisely the situation in the present case.
Further, the Advocate General agrees with the referring court that the registration of a trademark for "computer software" is too broad for the same reasons given in the CJEU judgement of 1995, Mercury Communications Ltd v Mercury Interactive Ltd, FSR 850, where it was ruled that "the registration of a trade mark for "computer software" would cover any set of recorded digital instruction used to control any type of computer. It would cover not just the plaintiff’s type of products …". In this way, the registration of such trademark creates an unduly extended monopoly, given that the mark covers "an enormous and enormously diffuse range of products". The Advocate General clarified in his opinion that, although this case was decided in 1995, it still properly maintains its contemporary character, in particular in the current digital era, where a practically limitless array of ‘smart’ goods incorporate, or are supplied with, computer software.
For all these reasons, the Advocate General concludes that, in his view, registration of a trademark for "computer software" is unjustified and "contrary to the public interest", on the ground that it confers on the owner a monopoly of uncontrolled width, which cannot be justified by any legitimate commercial interest.
Also, the Advocate General showed his favor to the Defendant’s counterclaim concerning the registration in bad faith of the Applicant’s trademarks at stake. In fact, in his view, where the applicant is found to have a deliberate intention to acquire rights it has no intention to use, potentially to prevent third parties from using the registered trademark for the sale of those goods and services, "then there is bad faith". In those circumstances, continues Advocate General Tanchev, the applicant is improperly seeking a monopoly to exclude potential competitors from using those signs: this behavior could amount to an abuse of the trademark system.
The possible impacts on the EU legal system in case the CJEU should deliver a judgement in line with the Advocate General opinion at hand are impressive; further, it is important to recall that the CJEU judgement at stake will have binding effects for the referring national judge of the UK even after Brexit. Indeed, according to Article 86 of the Annex to the Proposal for a Council decision on the signing of the Agreement on the withdrawal of the United Kingdom from the European Union, the CJEU shall continue to have jurisdiction to give preliminary rulings on requests from courts and tribunals of the UK made before 31 December 2020.
As the opinion of the Advocate General highlighted, further steps forward are being made in the direction of considering too broad and generic some terms used by trademark applicants, as seen in the IP Translator case and in the Mercury Communications case decided in 2012 and 1995. In light of this, and similarly to the case at hand, the same approach may in the future be followed for other terms which are able to recall a large scope when it comes to the identification of the specific goods and services involved in the trademark application, such as the terms "publications" or "consulting services".
In addition, the judgement of the CJEU could provide important guidelines for the future on another issue raised with this dispute by the High Court of Justice of the UK, namely whether the ground for invalidity related to the lack of clarity and precision of the goods and services involved may be relevant also for trademarks that are already registered.
Although the case at hand has not yet reached a final decision from the CJEU, which will likely be delivered within the next months, the opinions of the Advocate Generals historically play an important role for the direction of the judgements. In this way, given the importance of the possible consequences of this judgement anticipated by the Advocate General, the decision of the CJEU has become even more awaited.